Cisco to sell Linksys to Belkin

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After 10 years of owning Linksys, Cisco will get rid of home router business.

Belkin has struck a deal to buy Linksys from Cisco, bringing Cisco's 10-year dalliance with the consumer networking market closer to an end.

Cisco's Linksys division sells routers and wireless access points to consumers, which is in line with Cisco's overall focus on networking gear but diverges from the company's core focus on selling to big businesses rather than home users. Cisco has been gradually stepping out of the consumer business—for example, by killing off the Flip camera line and Umi home videoconferencing.

Cisco recently engaged Barclays to help sell off the home networking division. Belkin's purchase of Linksys is expected to close in March 2013, but the companies did not reveal the purchase price. Cisco bought Linksys in 2003 for $500 million.

Existing customers don't have to worry about whether their Linksys products will continue to be supported, Belkin said in its announcement. "Belkin intends to maintain the Linksys brand and will offer support for Linksys products as part of this transaction," Belkin said. "All valid warranties will be honored by Belkin for current and future Linksys products. After the transaction closes, Belkin will account for approximately 30 percent of the US retail home and small business networking market."

Belkin's existing business includes wireless and wired networking products as well as an assortment of device cases, mobile accessories, cables, and audio and video products.

Cisco's stewardship of Linksys annoyed some users (including me) last year when certain routers were automatically linked to a cloud-based management service that was less functional than the traditional, local router management interface.(Cisco backpedaled after an uproar.)

Belkin said it will expand Linksys's market presence, hinting that Linksys products will somehow be linked to or sold alongside Belkin's WeMo home automation platform. Besides home users, Belkin wants to use Linksys to target service providers and small businesses.

While no purchase price was announced today, Bloomberg reported last month that Linksys is "likely to fetch much less than the $500 million Cisco paid for it in 2003 because it is a mature consumer business with low margins."

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[DKT27]

Belkin buys Linksys

Belkin has announced that they've bought the Home Networking Business Unit from Cisco, which includes Linksys, for an undisclosed amount. With the purchase, they'll occupy around 30% of the market.

Well-known connectivity and networking company, Belkin, has announced today that they plan to purchase another well-known connectivity and networking company, Linksys, from Cisco. Belkin has entered an agreement that will see it purchase the Home Networking Business Unit from Cisco, which includes a swathe of technology, employees and of course the Linksys brand.

According to the press release from Belkin, they intend to maintain the Linksys brand as well as provide support for existing products and honor all existing and future Linksys warranties. When the acquisition has been finalized, Belkin estimates that they will hold approximately 30% of the United States "retail home and small business networking market".

Chet Pipkin, CEO of Belkin, said that they are "very excited about this announcement" as the two companies "share many core beliefs"; "Linksys will enhance Belkin’s capabilities to meet the needs of the service provider space and small business users". Belkin did not disclose how much it paid for the Home Networking Business Unit, and as they are a private company they likely won't even after the deal closes, which is expected to happen in March 2013.

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